Document Number:
BUSO-0018
Policy Owner:
Business Office
Revision #:
v3.0
Status:
Approved

General Description

Policy Summary:

To promote compliance with IRS regulation, this policy provides guidance regarding the university’s
tax reporting responsibilities related to U.S. supplier payments.

Purpose:

The IRS requires the university to report all payments for services to non-corporate entities, individuals and partnerships. Service payments include honoraria, computer services, speeches, tutoring, etc. Amounts paid to non-employees for services totaling more than $600 in a calendar year will be reported on a 1099-NEC. Payments for merchandise are not reportable. Payment requests for personal services to university employees are considered wages, and will be paid through payroll and reported on a W-2. 

Scope:

This policy applies to all university staff and faculty.

Exceptions:

None.

Policy Content

Corporate payees must complete IRS Form W-9 certifying their exemption from 1099 reporting prior to receiving a payment from Trinity University. The federal government requires the name, address, and taxpayer identification number (social security or partnership) for each individual or partnership receiving payments.

Payees who fail to provide the required information for IRS Form W-9 are subject to the 24% backup withholding and/or penalties for non-compliance. If the individual or partnership is from a foreign country, the government, in most cases, requires that 24% be withheld and remitted. 

Payment requests to non-employees for services are submitted on a Supplier Invoice Request in Workday, with supporting documentation attached. Reference the Workday Quick Reference Guide (QRG) Create Supplier Invoice Request for detailed procedures. 

Terms & Definitions

Terms and Definitions:

Term:

Definition:
Form 1099 An information form filed with the IRS and
the supplier (non-employee) that reports
total payments during the calendar year.
Form W-9 Form used to obtain the correct name and
taxpayer identification number (TIN) or Social
Security Number (SSN) combination for an
individual or entity in order to prepare Form
1099.
Backup Withholding The process of withholding 24% tax from a
supplier payment because the supplier has
failed to provide a completed Form W-9.

Revision Management

Revision History Log:

Revision #:

Date:

Recorded By:
v3.0 7/14/2025 3:52 PM Pamela Mota
v2.0 5/31/2022 12:05 PM Holly Warfel
v1.0 7/25/2019 12:13 PM Holly Warfel

 

Vice President Approval:

Name:

Title:
Gary Logan Vice President for Finance & Administration